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NEW YORK (
) -- "If you pay up for stocks in this market, you will lose," Jim Cramer's cautioned viewers of his "Mad Money" TV show Monday.
He said investors cannot get caught up in the moment, thinking stocks will surge higher. "If you pay up," he said, "you will get mowed down."
Cramer said there needs to improvement on the global economic front, or stocks will be headed towards Dow 8,260, a level where the systemic risk has been taken out of the equation. To illustrate his point, Cramer returned to the checklist of six requirements he created June 2, as a measure of the world's economic health.
1. Fine Print On Financial Regulation. Cramer said he's seen no movement on financial regulation, something that continues to weigh on the banks.
2. Spanish Bank Stabilization. Cramer said the Spanish banks are still in a precarious position, and could still get hammered.
3. Lower Unemployment. In a word, Cramer called last week's unemployment data "horrible." He said business simply can't or won't hire in this uncertain environment.
4. Oil Spill Resolution. Cramer said there's been mixed progress on this catastrophe. While some 10,000 barrels a day of oil are now being captured from the Gulf spill, that number means the initial estimates of the spill's size were dramatically too low.
5. China's Soft Landing. Cramer said he hasn't heard anything from China on whether its "soft landing" approach is working.
6. Euro Stabilization. Cramer said he sees no signs of improvement, or even stabilization.
All in all, Cramer said we've made no progress on this list of "must have" economic information. In fact, he said, we may have slipped back a bit from June 2. Until all these items have been resolved," he said, "the next stop is Dow 8,260."
Attractive Chip Stock
While the markets may seem to be a slow motion train wreck, Cramer said there are still some stocks worth buying as they trend lower. He said that chip designer
is one such company, and a great speculative way to play the mobile Internet tsunami.
Cramer last recommended ARM Holdings on Oct. 16, and since then shares have risen 53%. He still feels shares can head higher.
ARM's lower power chip designs now reside in almost 95% of all smart phones, mp3 players and other portable devices such as the iPad from
, a stock, which he owns for his charitable trust,
Action Alerts PLUS. The company enjoys a 50 cents to 75 cents royalty for every device sold.
ARM had a rather bullish analyst day on May 19, when it said that its addressable market, the number of devices its chip designs could eventually end up in, will almost double, from 15 billion to almost 29 billion by 2014.
Cramer said while ARM looks expensive at 31 times earnings, it's actually not, given its 22% long term growth rate can transcend the European contagion, a slowing China and stifled U.S. economy. He recommended buying more of ARM as it heads lower.
Powerful Investment Trends
"We need investing themes that can't be spoiled by the governments of the world," Cramer told viewers, as he unveiled the first of five investment trends that can withstand the global economic woes.
Cramer's first big trend is the rise of the middle class in China. Cramer said while many are worried about China, he believes the Chinese government and achieve a soft landing, deflating the real estate bubble while leaving other industries in tact. Recent estimates predict the Chinese slowdown lowering GDP from 11.9% to 8.1% by the fourth quarter of 2010. "That's still a lot of growth," said Cramer.
Cramer said he's still bullish on both
in the Internet space, and companies like
, which gets 30% of its business from China, along with
In the retail space, Cramer gave the nod to
, which has limited European exposure, and
, which is expanding form 300 to 500 cities in China.
Finally, Cramer recommended
, a stock up 90% since his July 21 recommendation, and
, whose KFC franchise is taking China by storm with 37% year-over-year growth.
Cramer told a viewer that he's still bullish on
, which he likes for its growth and the fact it has no exposure to old wireline businesses.
Cramer told another viewer that he likes
, a stock which he owns for his charitable trust,
Action Alerts PLUS, for its 3% yield, and
, which is a smaller, more speculative semiconductor stock.
While he also likes network equipment maker
, Cramer said in this market, no one likely cares about this company.
Finally, Cramer told a viewer that they cannot invest in
, or any oil or energy company, until the
spill in the gulf has stopped flowing.
Cramer was bullish on
He was bearish on
The Bank of Ireland
Deere & Co
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was long Apple, Intel.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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